SINGAPORE: The Australian dollar edged higher on Tuesday after China's third-quarter economic growth slightly exceeded market expectations, while the US dollar struggled to gain traction and retreated against the yen.
China's economy grew 7.3 percent in July-September from a year earlier, slightly above the 7.2 percent forecast by analysts. However, the growth was the weakest for any quarter since the 2008/09 global financial crisis.
The Aussie dollar, often seen as a liquid proxy of Chinese growth prospects given Australia's large trade exposure to China, rose 0.5 percent on the day to $0.8827.
Nonetheless, broader risk sentiment still looked wobbly in the wake of this month's market volatility, with Asian shares generally flat on the day and Japan's benchmark Nikkei share average falling 1.9 percent.
"The absolute China number isn't all that great and the trend has been toward a slower growth rate, so it's probably hard to openly move in the direction of putting risk on," said Koji Fukaya, CEO of FPG Securities in Tokyo. Weak Japanese equities lent support to the yen, a low-yielding currency that can get a lift from position squaring when investor risk appetites decline.
The dollar slid 0.6 percent versus the yen to 106.35 yen.
The greenback also edged lower versus a basket of major currencies, with the dollar index easing 0.2 percent to 84.821.
The dollar has lost ground in recent weeks as concerns about slowing global growth prompted investors to trim bets that the US Federal Reserve will raise interest rates soon after an expected end in its stimulus later this month.
A drop in US Treasury yields helped to weigh on the dollar. The US 10-year Treasury yield slipped around 4 basis points to 2.146 percent.
The euro rose 0.2 percent against the dollar to $1.2820 . Against the yen, the single currency slipped 0.4 percent to 136.34 yen.
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